Cerrado Gold – Full-Year 2024 Financials and Operations at Minera Don Nicolas, Value Proposition of Lagoa Salgada, and Optionality At Mont Sorcier
Mark Brennan, Founder, CEO, and Director of Cerrado Gold Inc (TSX.V: CERT) (OTCQX: CRDOF), joins me to review the Q4 and full-year 2024 operations and financials at Minera Don Nicolas in Argentina, the transformative acquisition underway of Ascendant Resources and the value proposition at the Lagoa Salgada VMS Project in Portugal, along with the further value and optionality at the Mont Sorcier Iron-Vanadium project in Quebec.
Q4/24 and Annual Minera Don Nicholas Financial and Operating Highlights:
- Production of 10,431 GEO in Q4 and Annual production of 54,494 GEO
- Adjusted EBITDA of $4.5 million in Q4 and US$24.4 million for the year excluding assets sales and Option payment proceeds.
- Received $34 million in Asset sale and Option payment proceeds in Q4: Received $49 million for the full year with up to $25 million ($15 million guaranteed) due in the coming years.
- AISC of $1,953 during Q4 vs $1,594 in Q4/23 due to lower production levels and ongoing inflationary pressures in Argentina
- Received Asset Sale and Option payments totaling $34 MM during the quarter, significantly strengthening the balance sheet.
- Focus remains on ramping up heap leach production to 4,000 - 4,500 GEO per month
Mark and I review of their Minera Don Nicolas producing gold project in Argentina, and how the production profile can grow by eventually going underground, as well as finding more satellite open-pits at surface. The higher gold prices are allowing for a faster repayment of debt along with an aggressive exploration program underway in 2025 to expand resources at depth and at key surface targets.
Operational results for the fourth quarter demonstrated a decrease in production relative to Q4/23 as high-grade ore to the CIL plant declined as mining from the Calandrias Norte pit was completed, and as the operation transitioned to focus on heap leach production. With higher gold prices, the CIL plant is expected to continue processing low grade stockpiles through Q2/25 when it will be blended with new high-grade material from initial underground mining feed from Q3/25 onward. The ramp up of heap leach operations continues to improve as crushing capacity continued to climb with production of 5,956 GEO during the quarter.
Next we unpack the ongoing transaction to acquire Ascendant Resources Inc. (TSX: ASND) for their 80% interest in the robust Lagoa Salgada VMS Project with a Post-tax NPV of US$147 million and a 39% IRR in current Feasibility Study. The vote is next week and this Project adds both substantial precious metals resources along with critical minerals exposure (34% silver & Gold, 30% Zinc, 15% copper, 14% lead, 7% tin) to the future production profile. Project economics studies anticipate lowest cost quartile production with US$0.59/lb Zinc Equivalent All in sustaining cost (AISC) for the first 5 years. Mark also highlights how there is extensive exploration potential to keep expanding resources at this Project. There will be an optimized Feasibility Study due in Q3, construction decision by year end 2025 and initial production expected in second half of 2027.
We wrap up discussing the underappreciated value and ongoing derisking work that is moving towards an updated economic study at the Mont Sorcier Iron-Vanadium in Quebec. Recent metallurgical test work, announced on May 1st has reaffirmed the potential to produce high grade and high purity iron concentrate grading in excess of 67% iron with silica and alumina content below 2.3%. More ongoing test work and improvements to the overall process design will be at the core of the NI 43-101 Bankable Feasibility Study ("BFS") which is targeted to be completed by the end of Q1 2026.
If you have questions for Mark regarding Cerrado Gold, then please email those to me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of Cerrado Gold at the time of this recording, and may choose to buy or sell shares at any time.
